tv [untitled] February 6, 2012 5:48am-6:18am PST
rate increases, we are actually investing and upgrading the system that ratepayers and voters wanted us to do as they approved proposition in 2002. it was a nice enhancement to the financial planning documents. it helps to explain that it is not operating costs run amok. when you track this chart, every single year, you can see that a lot of the decisions that we make, particularly those related to capital, it means that in any one year a cut to that capital budget does not result in that much savings. commissioner, you highlighted
that with your question about the west side recycling project. it is a very small percentage of savings, even if that were delayed into a further budget year. >> with respect to the 30% problem, we do not have, at this point, a plan, really, for reducing that. is that not correct? there are tools and new optionsn debt. my question is, what should we do as a part of this budget
cycle? how should we portray rates looking forward, given that uncertainty. it lacks a great question. february 14, we will be asking you to adopt your 10-year financial plan to show great increases. sitting there, we think we have options for getting rid of something that could cause undue concern. i would go back and reduce that to a different number and in the footnotes, show the options for how you get there. we would show the options and get there in different ways. >> i am reluctant to change plans until you have one in
place. just putting us in wishful thinking is not a good idea. if you do have options that we can actively pursue and are worthy of a robust footnote, and where we can do something more explicit, where there is less uncertainty, that is the number to go with. that will be coming back to us on the 14th. >> right. >> why can any of these be appropriated now in future thinking? reducing that? >> there are some that create property sales. identifying surplus property makes sense. we know that that transaction will close before june, 2014. some of them, they are really
predicated upon the decisions, whether you say yes or no. it is not a decision that is made without you making that decision. the other one is increasing it to 15 miles of replacement. even though the numbers are small, that is an area where we look to the commission to say -- is that palatable? do we need that investment? should they continue through the supply assurances? >> with that particular one, you have to show how many miles we can do. >> part of it is -- what is the target? you would not want an increase of more than 15%. for example, that was the higher end of what was done in the past.
to get that, other than the property sale, if we do not have repayments from wholesale customers, the next place that you get real cuts is cutting the operating budget. my concern is i would hate to go ahead and look at cutting positions if we think that the option is going to ultimately happen and be a better option, so that we can show what the effect would be. to have a $5 million cut in the department, that could save 8%. property sales would take you under 20. that starts to talk about layoffs, if you could implement that. i would want to work on something else, is the point. i would like to work on that transfer. actually cutting the budget, there could be a whole other set of implications out there in the
world. you do not want that. >> if we keep it where it is now, it will show that 30%. >> again, it is a plan. it assumes a variety of things. it could assume payment from wholesale customers. if we disclose that, that is possible to do. there are a variety of things in this plan that involves spending money on capital that we do not know if they will happen or not. you have seen work on the pipeline dropping by $10 million because when we started we realized that they could not drop as fast. plans changed. we are still trying to figure out how, but i would like to show that we are going to do something to get it down and list what those things might be without causing all of the pain of the most drastic in the
operating budget. you have to decide if that is good enough, i guess. >> the tough thing about the repayments from wholesale customers is that that is a decision that we do not get to make. in other areas, i am more comfortable projecting that this is what we will plan to do. that is one where we do not have control. absent a single out -- signal -- >> after the thursday meeting, the immediate reaction was -- how fast can you do it? the question there is, we want to make sure. but we have two years. if they can make this payment, they have three years to make it happen.
the real issue is, can we do it fast enough when the market is as good as it is? clearly, the boston board made it happen as fast as it could happen. it is not under our control and it is not done, but yes. >> i guess that my question on that would be, given that the intent was to enable every payment, and i think we can, if there would be anything about us putting a particular number in the budget that would make it more difficult >> i do not think so. they will have the option of deciding just how much they want to pay -- more difficult. >> i do not think so. they will have the option of deciding just how much they want
to pay. sorry, i did not realize you were still back there. [laughter] >> art jensen -- >> i was trying to put words in your mouth. >> it is all right. we would certainly want to move ahead. we have been studying this aggressively. if i could give you a number today, more importantly it i am sure the would like the certainty. i do not think anything that you put in your budget documents would have an adverse impact, going forward. if anything, it might have a positive impact, showing a willingness on the part of the city to deal. speculatively, that is helpful. >> thank you. there were two other attachments said you see them as part of
so, that includes the question and answer follow up. we will do the same for whatever questions you had today for hetch hetchy water bureau. >> one question i had at the last meeting was the facilities renewal program. i was able, and staff helped me to look at some of the facilities that were subject to that plan, and i concluded from that that first of all, there is not, in the current version of that plan, anything that could be construed as gold plating. i think that there is a real range of need. that there are some facilities that are most notably in pretty bad shape. the same facilities had three very new buildings that improved
shop conditions out there. my take away is that that is all work that needs to happen. but that there is a lot of discretion as to how we spend that time. as long as we address those issues in a timely way, nothing forces us to do it. if we need relief, we can take relief in that year and it can be already funded and they will be all ready to continue with improvements. from my perspective, it was good. the emphasis on the shop and the needs that are being addressed our real needs. >> any other comments? >> i would suggest that we all review these to make sure that everything has been answered to
satisfaction. >> homework? >> commissioners, if you do not have additional questions on this, of we were going to go into the bureau's, if that works for you. the first is general services, then manager, and then public comment. >> public comment. >> thanks. i will get to my script in a moment. let me start with options to reduce the 30%. considering this is the first time i have seen this, i am reacting to a and we are all in support of the prepayment from moscow, however it can manifest itself. we were already sort of barely doing this as effectively as it
began. the property sales, that is a question of time and when they book, i am not sure there is an idea to sell more surplus property than we already have in the works, unless i missed something there. the water transfer, you heard it on that -- i don't have a strong view, i think that relates to the general water supply issues and if that is deemed deferrable, that will be it. i think we need to hear more and the next couple of months from modesto and turlock. the main replacement that is important to increase our work there, i think we have gotten behind and that is part of getting back to a state of good repair.
hi am with differing that based on the water supply needs that the need to build that right now, we need to do the planning work, but pulling out or deferring the capital work may be prudent and sales of an additional amount of water brings assumptions that i would guess. this is just looking at that year and decreasing it. i'm not ready to concede that fiscal year 14, that we should not go back and consider reopening that. i hope it is a bold experiment to do five years way in advance. to say we were good for the
first four years and the time the fifth year came around, we were doing so well that we were planning so that people aren't using and we need to open and a just that so not as to increase the total revenue but to smooth out the fiscal year ending 14 and 15. that is an option not inc. in this slide. the bills are helpful to analyze and i appreciate that questions about these substitutions and would not suggest there is any broadside effect on the gold- plated positions and staff has constrained position growth very carefully and ask for substitutions and it was more of a general comments not
necessarily looking holistic lacrosse all kinds of organizations and it is a much broader discussion than we could get into here. what i was actually suggesting is if there are operating budget initiatives we can take such as the advancing the grease removal device installation so as to reduce the need for chemicals if there could be a $50,000 investment that saves us $30,000 in chemical. i'm not sure that has been any further work on that but that is a good start and if there are things that present themselves as opportunities, we can't do that. thank you. >> thank you.
>> thank you again for raising that issue related to the employees. i cannot thank you enough because i like the figure and i think based on your comments just now, what would be interesting to see is what the number is in any other departments. we know that at times, these reclassifications or promotions result in a higher wage -- there are differences between the capacity needs of certain classifications and sometimes you can get more done with a different classification and the department is certainly better off for that but i would be curious to know in other city departments, what that figure really is.
i think perception is reality and i am glad we shed some light on this with respect to the public utilities commission and i appreciate that you brought it up. >> it is a larger discussion and i am happy to let that the financial manager at a smaller city departments as opposed a larger one and say why is there a manager -- that seems an equitable and you can start to look at the number of human- resources people and if we have 2400 authorized positions -- what is our percentage being able to deal with that -- maybe
we have the right amount of health and safety folks and development folks and may be others don't -- you can look at the ratios and span of control, the senior station engineers -- there are a lot of different issues when you start to analyze positions across the larger populations. i'm happy to talk about that at another time. >> thank you. are we many -- are we ready to move forward? >> just because it is such a horrible term for bureaucrats, for those two are watching -- we have bureaus supporting all of the operating units. if we have accountants doing work for hetch hetchy and wastewater -- we charge of the different agencies for the work
and we bring it to you this way and i would not want the project to set out side -- they are all doing the work. that is a hopeful context and the current budget is about $860 million. 76 of that is related to bureau support services like financing and accounting and human- resources. less than 10% is support whether it is the e-mail system or auditing or prevention controls or government relations, it's a relatively small percentage and all of those investments add up to about $75 million and we see that on the first slide here. the cost and the changes there are relatively flat like every part of the budget we have talked about except plans debt service.
this is just support function and costs going up to be an utilization of fringe benefit costs otherwise result in a an adopted budget cahan -- >> is not up on the screen. >> if you could put that on the screen. $76 million is the current 12-13 adopted budget. one would be some investments and i.t. securities, upgrades and the annual as asian of the health benefit costs. we are able to score some savings with employee-paid share of retirement costs occurring
there. additional retirement costs and one time reductions for systems fund in the first year of the two years. on the people side of this, no new position and the next few years. what that means as far as business services, we provide the e-mail and financial support. the chart is there for you today and i would just like to do a call out for because the higher -- the records retention of
scheduled [inaudible] who publish all of the quarterly financial reports as well as the award winning budget book and comprehensive financial report and three clean audits. these are the people that provide the internal service to make sure our departments can do all the good work that they do. the budget is roughly 300 people. these are the positions we keep vacant and we do not desert -- and -- that is where we usually do position substitution if they are ever needed.
the business services team, you see the changes here. the ones i would like to highlight our the i.t. systems and investments and as you read about recently in the newspapers, there is always computer hacking at various institutions. we are doing a lot of good work to evaluate every single systems we have and you can see that as part of the audit and review report. what is proposed is investment in a chief i.t. security officer. we're not asking for more money , just investment in intrusion detection. the retirement decisions are the same one additional decision to support the water meter program
again -- we are not proposing any new ads, just a substitution with the currently vacant position. the office of the general manager is a very flat budget and the notable item there is additional support and software and otherwise, starting at -- that is a very flat. no position changes in the general manager's budget and there are a couple of new programs and i think they will be of interest to you but i will let my colleague in external affairs tell you about that. >> i'm the assistant general
manager for external affairs. our presentation for our bureau is different from last year when we were coming forward with the new program. our theme this year is a flat budgthis sly describes what the budget looks like for the upcoming two years. the minimal is to no increase is happening except a small increase -- [inaudible] not much to share with you -- we are not asking for any additional staff position.
>> this is not only a question for you but other presenters -- are we having some kind of 1 pager suggesting the fact that not only are we saving money but how we are increasing the workload on current employes because we're not hiring new positions? that is an important point to make. not that we are saving money in new hires, we are creating an extra burden on current employees. is there a way to do that in terms of responsibilities pound-wide here? >> the fact that people are taking on more work with less
positions. we have been living that as well. >> we are in negotiations right now. >> noted. this provides an organizational chart about how the journalist affairs bureau is structured. the next slide about how the legislative affairs team -- the strategic planning team, communications and community benefit program. >> the priority in external affairs -- i appreciate the general manager framed with how you think about the work of the bureau. we take that seriously as to